A Dunedin-based gaming trust, and another trust which paid more than $460,000 to its Queenstown-based trustee, have had their appeals to the Gambling Commission dismissed and their licences suspended.
The Gambling Commission has upheld decisions by the Department of Internal Affairs to suspend the licence of Dunedin-based gaming trust, the Southern Trust, for five days; and to increase the suspension of the Trusts Charitable Foundation from two days to six.
Gambling Commission chief gambling commissioner - Dunedin mayor Peter Chin - declined to comment on the decisions yesterday.
In the case of the Levin-based Trusts Charitable Foundation, the gaming society was suspended after it paid $468,000 in fees and expenses to a company - Evergreen Lodge Ltd - operated by Queenstown-based businessman Murray Acklin.
Mr Acklin was appointed by the foundation's trustees as "an executive trustee with special responsibilities".
As part of his role, he identified sites with turnover in excess of $1 million, which were aligned with other societies, and offered them free TAB upgrades to sign with the foundation.
The arrangement began in 2006 and ended in 2009.
During that time, the Department of Internal Affairs alleges Mr Acklin - a former member of the New Zealand Racing Board - offered free upgrades of the venues' TAB facilities, worth an estimated $10,000.
Aside from the New Zealand Racing Board, the foundation is the largest contributor of funding to the racing industry, with at least 50% of venues' contestable gaming machine proceeds awarded to racing clubs and organisations.
The foundation argued Mr Acklin's role was not only essential, but necessary given the competitive nature of gaming societies, and he was responsible for gaining or retaining 26 venues.
The Trusts Charitable Foundation chairman Malcolm McElrea, of Milton, told the Otago Daily Times the foundation would "accept the findings and amend our policies accordingly".
He declined to comment further until he had read the 35-page decision.
Calls to Mr Acklin, who is also president of GallopSouth, were not returned yesterday.
Internal Affairs Department compliance director Mike Hill said gaming machine societies were not allowed to compete with one another for venues.
"Gambling societies are not commercial ventures but exist to hold licences and conduct gambling to raise money for distribution to community purposes.
"Many societies seem to have lost sight of that fact."
Mr Hill, in reference to the Southern Trust decision, said gaming societies could not use pokie proceeds for unnecessary entertainment expenditure.
Southern Trust had its licence suspended after it spent $190,000 on four venues, and for paying $40,000 in brokerage fees for securing agreements with a venue operator covering two venues.
Southern Trust chief executive Karen Shea, of Dunedin, told the Otago Daily Times she was "somewhat surprised" by the decision.
"The decision is what it is. We have to put it behind us."
A five-day suspension with all its machines shut down, could cost the trust - the fourth biggest gaming machine society in the country - an estimated $400,000, of which $160,000 would have been expected to be returned to the community, the remainder being accounted for by tax, and the operating costs of the trust and the venues.
Both suspensions must occur within one month of yesterday's notification of the decisions.
Suspended
The Southern Trust
- Based in Dunedin.
- Has 89 venues, with 954 gaming machines.
- Licence suspended for five days.
The Trusts Charitable Foundation
- Based in Levin.
- Has 74 venues, with 893 gaming machines.
- Licence suspension increased from two to six days.
